Asia report: Markets rise even as trade concern grows

Markets in Asia were higher across the board on Tuesday, as traders in China returned from an extended holiday, but there was still consternation abound as to the direction of high-level trade talks between the United States and China, set to kick off later in the week.

In Japan, the Nikkei 225 was 0.99% firmer at 21,587.78, as the yen strengthened 0.34% against the dollar to last trade at JPY 106.89.

Of the major components on the benchmark index, automation specialist Fanuc was up 1.77%, fashion firm Fast Retailing rose 1.17%, and technology conglomerate SoftBank Group managed gains of 0.82%.

The broader Topix index was ahead 0.87% in Tokyo trading, to finish up its session at 1,586.50.

On the mainland, the Shanghai Composite rose 0.29% to 2,913.57, and the smaller, technology-heavy Shenzhen Composite grew by 0.21% to close at 1,598.64.

South Korea’s Kospi was 1.21% higher at 2,046.25, while the Hang Seng Index in Hong Kong was ahead 0.28% at 25,893.40.

Both of the blue-chip technology stocks were in the green in Seoul, with chipmaker SK Hynix up 0.75%, and Samsung Electronics ahead 2.41%.

The gains for Samsung came even after the company said it was expecting third-quarter operating profit to more than halve compared to a year ago, as the result was still set to beat analyst expectations.

Investor attention was still turned towards high-level trade talks between Washington and Beijing in the US federal capital later in the week, with reports on Monday suggesting Chinese officials were growing more reticent to accept a number of the White House’s broader demands.

Fresh complications also arose overnight, with the US Commerce Department adding 28 Chinese companies and organisations to its ‘Entity List’ - essentially a blacklist - placing restrictions on American companies from doing business with them.

“The odds for some sort of a trade deal to get done this week seem to have fallen from a coin flip to just 40%,” said Edward Moya, analyst at Oanda.

“Both sides need a win this week and despite the latest flare ups, we should still see some progress come out of this week's talks.”

Oil prices were lower as the region went to bed, with Brent crude last down 1.11% at $57.71 per barrel, and West Texas Intermediate off 1.4% at $52.02.

In Australia, the S&P/ASX 200 rose 0.45% to close its trading session at 6,593.40, with most subindices in the green, including the hefty financials sector.

Of the big four banks, Australia and New Zealand Banking Group was up 0.44%, Commonwealth Bank of Australia added 0.85%, National Australia Bank was ahead 0.61%, and Westpac Banking Corporation reversed earlier losses to finish 0.24% above the waterline.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 rose 0.4% to break the 11,000 point mark, closing at 11,016.15.

The Fonterra Shareholders’ Fund was higher once again, rising 1.3% after it emerged that Fraser Whineray - chief executive officer of energy generator and retailer Mercury - was set to take up the chief operating officer’s desk at Fonterra.

Fonterra - New Zealand’s largest company - is a farmer-owned dairy cooperative, with the Fonterra Shareholders’ Fund a listed tool allowing investors to participate in its performance.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.15% at AUD 1.4830, and the Kiwi advancing 0.48% to NZD 1.5823.